Economy Squeezes Corporate Free PC Programs

The economic downturn is causing major corporations to rethink - or even cancel - programs to provide their employees and families with home PCs and Internet access.

The economic downturn is causing major corporations to rethink - or even cancel - programs to provide their employees and families with home PCs and Internet access.
Ford Motor confirmed a week ago that it has formally scrapped a program intended to provide 350,000 employees in its global work force with free PCs and subsidized Internet access. The program, dubbed Model E, was launched in February 2000 in partnership with PeoplePC, a San Francisco startup that sells PCs with Internet access to consumers and businesses for a monthly subscription fee.

Fords program had distributed about 160,000 computers to employees, primarily in the U.S. The program was suspended in May, and the company sent out an e-mail to workers earlier this month saying that due to the tough economic conditions, the program was being cancelled entirely.

Interactive Week has learned that another PeoplePC corporate partner, Delta Air Lines, has also suspended its program. Delta spokesman Andy McDill said the "Wired Work Force" program that the company initiated has been highly successful and very helpful in communicating with staff during the current industry turmoil. However, further rollout has been suspended because of the economic challenges the airline faces.
"It is our intent to resume our rollout in 2002 as the industrys financial condition improves," McDill said.
PeoplePC spokeswoman Lisa Murray said she was unaware of any other corporations canceling their programs. However, she acknowledged that the climate was making it difficult to sign up companies willing to do similar mass purchases. PeoplePC also has corporate purchasing programs with Cinergy, an Ohio-based energy company; Powergen, a British power utility; and Vivendi Universal

In recent weeks, PeoplePC also announced several partnership deals with companies and organizations to provide their employees and members with computers and Internet access at reduced rates. The company signed a deal to market the service to Ingersoll-Rands 50,000 retired employees last month, and forged an agreement last week with the Health Alliance Plan, a health care organization based in Michigan, to offer discounted service to its 600,000 members.
"Certainly, times have changed from a year ago," PeoplePCs Murray said. "But in the long term, corporations still see it as a major benefit for their employees, and as a way to cut costs."